EX-10.6 2 d372656dex106.htm FORM OF MARKETING AGREEMENT MARKETING AGREEMENT
Exhibit 10.6
This Marketing Agreement is made and entered into as of [•], 2012 (this “Agreement”), by and between Delek Refining, Ltd., a Texas limited partnership (“Delek Refining”), and Delek Marketing & Supply, LP, a Delaware limited partnership (“Delek Marketing”). Delek Refining and Delek Marketing are hereinafter sometimes referred to individually as a “Party” and collectively as the “Parties.”
ARTICLE 1
Capitalized terms used throughout this Agreement, shall have the meanings ascribed to such terms herein. The terms below shall have the following meanings:
“Affiliate” means, with to respect to a specified Person, any other Person controlling, controlled by or under common control with that first Person. As used in this definition, the term “control” includes (i) with respect to any Person having voting securities or the equivalent and elected directors, managers or Persons performing similar functions, the ownership of or power to vote, directly or indirectly, voting securities or the equivalent representing 50% or more of the power to vote in the election of directors, managers or Persons performing similar functions, (ii) ownership of 50% or more of the equity or equivalent interest in any Person and (iii) the ability to direct the business and affairs of any Person by acting as a general partner, manager or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, Delek US and its subsidiaries (other than the Partnership and its subsidiaries), including Delek Refining, on the one hand, and the Partnership and its subsidiaries, including Delek Marketing, on the other hand, shall not be considered Affiliates of each other.
“Agreement” shall have the meaning assigned to such term in the Preamble.
“Applicable Law” means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, order, decree, permit, approval, concession, grant, franchise, license, agreement, requirement, or other governmental restriction or any similar form of decision of, or any provision of condition of any permit, license or other operating authorization issued under any of the foregoing by, or any determination by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including, without limitation, all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question.
“Arbitrable Dispute” means any and all disputes, claims, controversies and other matters in question between Delek Refining, on the one hand, and Delek Marketing, on the other hand, requiring arbitration under this Agreement.
“Barrel” shall mean a volume equal to 42 U.S. gallons of 231 cubic inches each.
“Big Xxxxx Terminal” shall mean the light product distribution terminal and associated assets owned and operated by an Affiliate of Delek Marketing and located in Big Xxxxx, Texas.
“Business Day” shall mean a day, other than a Saturday or Sunday, on which banks in New York, New York are open for the general transaction of business.
“Claimant” shall have the meaning assigned to such term in Section 11.12.
“Confidential Information” means all information, documents, records and data that a Party furnishes or otherwise discloses to the other Party (including any such items furnished prior to the execution of this Agreement), together with all analyses, compilations, studies, memoranda, notes or other documents, records or data (in whatever form maintained, whether documentary, computer or other electronic storage or otherwise) prepared by the receiving Party which contain or otherwise reflect or are generated from such information, documents, records and data; provided, however, that the term “Confidential Information” does not include any information that (i) at the time of disclosure or thereafter is or becomes generally available to or known by the public (other than as a result of a disclosure by the receiving Party), (ii) is developed by the receiving Party without reliance on any Confidential Information or (iii) is or was available to the receiving Party on a nonconfidential basis from a source other than the disclosing Party that, insofar as is known to the receiving Party after reasonable inquiry, is not prohibited from transmitting the information to the recipient by a contractual, legal or fiduciary obligation to the disclosing Party.
“Contract Quarter” means a three-month period that commences on January 1, April 1, July 1 or October 1, and ends on March 31, June 30, September 30 or December 31, respectively, except that the initial Contract Quarter shall commence on the Effective Date and end on [ ], 2012 and the final Contract Quarter shall end on the last day of the Term.
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“Control” (including with correlative meaning, the term “controlled by”) means, as used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
“Cost Basis” shall mean, for each Refinery Product, the price per gallon of such Refinery Product calculated as set forth for such Refinery Product in Schedule B, provided, however, that such Schedule B may be amended, modified or supplemented on a monthly basis or at such other times by written agreement of the Parties as may be necessary, or dictated by changing regulatory requirements, to reflect changes in market indices, increases in additive supply costs or increases in the type, number, characteristics or rates of fuels additives.
“Deficiency Notice” shall have the meaning assigned to such term in Section 6.9(a).
“Deficiency Payment” shall have the meaning assigned to such term in Section 6.9(a).
“Delek Marketing” shall have the meaning assigned to such term in the Preamble.
“Delek Refining” shall have the meaning assigned to such term in the Preamble.
“Delek Refining Accounts” shall mean all accounts, general intangibles, chattel paper, letters of credit, instruments and other rights to payments, all security for any such payment obligations of any such buyer and all cash or non-cash proceeds arising from the sale or other disposition of the Refinery Products during the Term.
“Delek Refining Contracts” shall mean any and all contracts or sales arrangements relating to the sale of the Refinery Products by Delek Refining in existence as of the date hereof or that come into existence during the Term.
“Delek US” means Delek US Holdings, Inc.
“Effective Date” means [ ], 2012. [closing date of IPO]
“Environmental Law” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law now or hereafter in effect, relating to pollution or protection of human health and the environment including, without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other similar federal, state or local environmental conservation and protection laws, each as amended from time to time.
“Environmental Permit” means any permit, approval, identification number, license, registration, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law.
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“Excluded Products” shall have the meaning assigned to such term in the Recitals.
“Finished Products” shall mean the Refinery Products classified as “finished product”; as set forth in Schedule A, as such Schedule A may be amended, modified or supplemented by written agreement of the Parties from time to time.
“Force Majeure” means acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, wars, blockades, insurrections, riots, storms, floods, washouts, arrests, the order of any court or Governmental Authority having jurisdiction while the same is in force and effect, civil disturbances, explosions, breakage, accident to machinery, storage tanks or lines of pipe, inability to obtain or unavoidable delay in obtaining material or equipment, any inability to deliver Refinery Products because of a failure of third-party pipelines, and any other causes whether of the kind herein enumerated or otherwise not reasonably within the control of the Party claiming suspension and which by the exercise of due diligence such Party is unable to prevent or overcome.
“Force Majeure Notice” shall have the meaning assigned to such term in Section 8.1.
“Force Majeure Party” shall have the meaning assigned to such term in Section 8.1.
“Force Majeure Period” shall have the meaning assigned to such term in Section 8.1.
“General Partner” shall mean the general partner of the Partnership.
“Governmental Authority” shall mean any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority exercising executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing.
“Initial Term” shall have the meaning assigned to such term in Section 3.1.
“Liabilities” shall mean any losses, liabilities, charges, damages, deficiencies, assessments, interests, fines, penalties, costs and expenses (collectively, “Costs”) of any kind (including reasonable attorneys’ fees and other fees, court costs and other disbursements), including any Costs directly or indirectly arising out of or related to any suit, proceeding, judgment, settlement or judicial or administrative order and any Costs arising from compliance or non-compliance with Environmental Law.
“Margin” shall mean, for each Refinery Product, the difference, if any, between the Sales Price minus the sum of the Cost Basis thereof plus any direct freight costs. For purposes of calculating the Margin for any monthly period, the Parties may not apply any positive or negative balance from a prior or subsequent period to such calculation. In the event such total difference between the sum of the Sales Price of all the Refinery Products sold minus the sum of the Cost Basis of such products is a negative number (on a monthly basis), the Margin shall equal zero (0).
“Marketing Indemnitees” shall have the meaning assigned to such term in Section 9.1.
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“Minimum Volume Commitment” shall have the meaning assigned to such term in Section 6.4.
“Notice Period” shall have the meaning assigned to such term in Section 3.2(b).
“Partnership” means Delek Logistics Partners, LP.
“Party” or “Parties” shall have the meanings assigned to such terms in the Preamble.
“Person” shall mean any individual, corporation, partnership, limited partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization, or governmental authority.
“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money Rates Section as the Prime Rate.
“Receiving Party Personnel” shall have the meaning assigned to such term in Section 10.1(d).
“Refinery” shall have the meaning assigned to such term in the Recitals.
“Refinery Products” shall have the meaning assigned to such term in the Recitals.
“Refining Indemnitees” shall have the meaning assigned to such term in Section 9.2.
“Renewal Term” shall have the meaning assigned to such term in Section 3.1.
“Respondent” shall have the meaning assigned to such term in Section 11.12.
“Sales Price” shall mean, for each Refinery Product, the price per gallon at which such Refinery Product is sold to third Persons, including any and all fees (excluding taxes) and additives cost, as set forth in the invoice therefor, less any discount or refund applied to such invoice price.
“Services Base Fee” shall have the meaning assigned to such term in Section 6.1(a).
“Services Profit Share” shall have the meaning assigned to such term in Section 6.1(b).
“Shortfall Payment” shall have the meaning assigned to such term in Section 6.5(a).
“Special Damages” shall have the meaning assigned to such term in Section 9.3.
“Suspension Notice” shall have the meaning assigned to such term in Section 3.2(b).
“Term” shall have the meaning assigned to such term in Section 3.1.
“Termination Notice” shall have the meaning assigned to such term in Section 8.3.
“Throughput Fee” shall have the meaning assigned to such term in Section 6.2.
“Tyler Terminal” shall mean Delek Refining’s light products terminal located at the Refinery.
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ARTICLE 2
2.1 Exclusive Marketing and Sales Services Provider. During the Term, Delek Marketing shall act as the exclusive marketing and sales agent on behalf of Delek Refining and be the exclusive provider of marketing and sales services for all of the Refinery Products sold by Delek Refining. During the Term, Delek Refining shall not market or sell the Refinery Products except pursuant to the terms of this Agreement.
(a) promptly identify potential new buyers of the Refinery Products, evaluate the creditworthiness of such potential new buyers and make recommendations to Delek Refining with respect to such potential new buyers (it being understood and agreed that Delek Refining shall make the decision as to whether it will transact with any such buyer and Delek Marketing will have no liability for any bad debt of such buyer);
(b) promptly negotiate and recommend for approval by Delek Refining commercially competitive terms (under prevailing market conditions) of any purchase orders or supply contracts for the Refinery Products;
(c) provide such personnel, equipment and vehicles necessary to perform the marketing and sales services contemplated herein;
(d) diligently monitor sales volumes and inventories of Refinery Products;
(e) act as the primary point of contact for sales and marketing issues relating to the Delek Refining Contracts; and
(f) monitor accounts receivable with respect to the Refinery Products and any taxes or other charges related thereto.
2.3 Access to Facilities and Systems During the Term of Agreement.
(a) Delek Marketing shall have the right to full and complete access to the Refinery, and related facilities, information and systems as may be reasonably necessary to market and sell the Refinery Products, and otherwise perform its obligations and exercise its rights under this Agreement.
(b) When accessing the facilities, Delek Marketing shall comply with such safety directives and guidelines as may be furnished to Delek Marketing by Delek Refining in writing from time to time.
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ARTICLE 3
(a) This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time upon written notice by either Party in the event the other Party commits a material breach of or materially defaults under the terms of this Agreement, and such breach or default is not cured (or a plan to cure such breach or default reasonably satisfactory to the non-breaching or non-defaulting Party has been adopted and is being diligently pursued by the breaching or defaulting Party) within fifteen (15) calendar days after receipt by the breaching Party of written notice from the non-breaching Party of such breach or default.
(b) From and after the second anniversary of the Effective Date, in the event that Delek Refining decides to permanently or indefinitely suspend refining operations at the Refinery for a period that shall continue for at least twelve (12) consecutive months, Delek Refining may provide written notice to Delek Marketing of Delek Refining’s intent to terminate this Agreement (the “Suspension Notice”). Such Suspension Notice shall be sent at any time (but not prior to the second anniversary of the Effective Date) after Delek Refining has notified Delek Marketing of such suspension and, upon the expiration of the period of twelve (12) months (which may run concurrently with the twelve (12) month period described in the immediately preceding sentence) following the date such notice is sent (the “Notice Period”), this Agreement shall terminate. If Delek Refining notifies Delek Marketing, more than two (2) months prior to the expiration of the Notice Period, of its intent to resume operations at the Refinery, then the Suspension Notice shall be deemed revoked and this Agreement shall continue in full force and effect as if such Suspension Notice had never been delivered. During the Notice Period, Delek Refining shall remain liable for Deficiency Payments.
(c) If refining operations at the Refinery are suspended for any reason (including refinery turnaround operations and other scheduled maintenance), then Delek Refining shall remain liable for Shortfall Payments under this Agreement for the duration of the suspension, unless and until this Agreement is terminated as provided above. Delek Refining shall provide at least thirty (30) days’ prior written notice of any suspension of operations at the Refinery due to a planned turnaround or scheduled maintenance, provided that Delek Refining shall not have any liability for any failure to notify, or delay in notifying, Delek Marketing of any such suspension except to the extent Delek Marketing has been materially damaged by such failure or delay.
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ARTICLE 4
4.3 Title and Risk of Loss to Refinery Products. During the Term, the title and risk of loss to the Refinery Products sold hereunder shall pass from Delek Refining to the third Person buyer of such Refinery Products (or, with respect to any Refinery Products sold hereunder to Delek Marketing for its own account, to Delek Marketing) pursuant to the terms of the purchase or supply contract or other sales arrangement between Delek Refining and such buyer. As between the Parties, during the Term, Delek Refining shall be deemed to be the (i) sole and exclusive owner, and in sole and exclusive control and possession, of all the Refinery Products delivered hereunder to any third Person buyer (or, with respect to any Refinery Products sold hereunder to Delek Marketing for its own account, to Delek Marketing); and (ii) sole and exclusive owner of all Delek Refining Accounts and Delek Refining Contracts, and Delek Marketing hereby expressly disclaims any rights, claims or interest in or to such Refinery Products (other than any Refinery Products sold hereunder to Delek Marketing for its own account), Delek Refining Accounts, or Delek Refining Contracts, whether now existing or otherwise arising during the Term; provided, however, nothing in this Section 4.3 is intended as a waiver of any claims related to the performance of the Parties of their respective obligations under this Agreement.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES
(a) Delek Refining is a limited partnership duly formed and validly existing;
(b) Delek Refining possesses all requisite power and authority to enter into and perform this Agreement and to carry out the transactions contemplated herein;
(c) Delek Refining’s execution, delivery, and performance of this Agreement have been duly authorized, and this Agreement has been duly executed and delivered by Delek Refining and (assuming due authorization by Delek Marketing) constitutes Delek Refining’s legal, valid, and binding obligation, enforceable against Delek Refining in accordance with its terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency and other legal principles pertaining to creditors’ rights;
(d) No suit, action or arbitration, or legal, administrative or other proceeding is pending or, to Delek Refining’s knowledge, threatened against it that would affect the validity or enforceability of this Agreement or the ability of Delek Refining to fulfill its obligations and commitments hereunder;
(e) No consents or approvals are required in connection with the execution, delivery and performance of this Agreement by Delek Refining that have not been obtained as of the date hereof;
(f) The execution, delivery and performance by Delek Refining of this Agreement will not (i) violate any law, rule or regulation applicable to it, (ii) result in any breach of, or constitute any default under, any contractual obligation thereof or of any Delek Refining Contract, or (iii) result in, or require, the creation or imposition of any lien or other encumbrance on any of the properties or revenues of Delek Marketing; and
(g) Delek Refining shall not take any action or cause any other Person to take any action not authorized or permitted by this Agreement that shall materially interfere or materially adversely affect Delek Marketing’s ability to comply with the terms and conditions of this Agreement.
(a) Delek Marketing is a limited partnership duly formed and validly existing;
(b) Delek Marketing possesses all requisite power and authority to enter into and perform this Agreement and to carry out the transactions contemplated herein;
(c) Delek Marketing’s execution, delivery, and performance of this Agreement have been duly authorized, and this Agreement has been duly executed and delivered by Delek Marketing and (assuming due authorization by Delek Refining) constitutes Delek Marketing’s legal, valid, and binding obligation, enforceable against Delek Marketing in accordance with its terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency and other legal principles pertaining to creditors’ rights;
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(d) No suit, action or arbitration, or legal, administrative or other proceeding is pending or, to Delek Marketing’s knowledge, threatened against Delek Marketing that would affect the validity or enforceability of this Agreement or the ability of Delek Marketing to fulfill its obligations and commitments hereunder;
(e) No consents or approvals are required in connection with the execution, delivery and performance of this Agreement by Delek Marketing that have not been obtained as of the date hereof; and
(f) The execution, delivery and performance by Delek Marketing of this Agreement will not (i) violate any law, rule or regulation applicable thereto, (ii) result in any breach of, or constitute any default under, any contractual obligation thereof, or (iii) result in, or require, the creation or imposition of any lien or other encumbrance on any of the properties or revenues of Delek Refining.
ARTICLE 6
(a) one and sixty-five hundredths cents ($0.0165) per gallon of Refinery Products sold pursuant to this Agreement during such period (the “Services Base Fee”); plus
(b) fifty percent (50%) of the Margin on the Finished Products sold pursuant to this Agreement during such period (the “Services Profit Share”), which Margin shall be calculated monthly based on the aggregate sales of Finished Product for the applicable one-month period; provided, however, that for any Contract Quarter, the aggregate Services Profit Share shall be not less than $175,000 nor greater than $500,000.
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(a) If, during any Contract Quarter during the Term, Delek Refining makes less than the Minimum Volume Commitment available to Delek Marketing, Delek Refining shall pay Delek Marketing an amount for such shortfall (a “Shortfall Payment”), if any, equal to the Services Base Fee multiplied by the difference between (i) the Minimum Volume Commitment and (ii) the aggregate volume of Refinery Products sold by Delek Refining during the applicable Contract Quarter. The Parties acknowledge and agree that there shall be no carry-over of deficiency volumes with respect to the Minimum Volume Commitment and the payment by Delek Refining of the Shortfall Payment shall relieve Delek Refining of any obligation to meet such Minimum Volume Commitment for the relevant Contract Quarter. The Parties further acknowledge and agree that there shall not be any carry-over of volumes in excess of the Minimum Volume Commitment to any subsequent Contract Quarter.
(b) If refining operations at the Refinery are suspended for any reason (including refinery turnaround operations and other scheduled maintenance), then Delek Refining shall remain liable for Shortfall Payments and the Services Profit Share under this Agreement for the duration of the suspension, unless and until this Agreement is terminated as provided in Section 3.2. Delek Refining shall provide at least thirty (30) days’ prior written notice of any suspension of operations at the Refinery due to a planned turnaround or scheduled maintenance, provided that Delek Refining shall not have any liability for any failure to notify, or delay in notifying, Delek Marketing of any such suspension except to the extent Delek Marketing has been materially damaged by such failure or delay.
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(a) As soon as practicable following the end of each calendar month under this Agreement, Delek Marketing shall deliver to Delek Refining a written notice (the “Deficiency Notice”) detailing any failure of Delek Refining to meet its obligations under Section 6.1, Section 6.4, Section 6.5 or Section 6.6 of this Agreement. The Deficiency Notice shall (i) specify in reasonable detail the nature of any deficiency and (ii) specify the approximate dollar amount that Delek Marketing believes would have been paid by Delek Refining to Delek Marketing if Delek Refining had complied with its obligations under Section 6.1, Section 6.4, Section 6.5 and Section 6.6 of this Agreement (the “Deficiency Payment”). Delek Refining shall pay the Deficiency Payment to Delek Marketing upon the later of: (i) ten (10) days after its receipt of the Deficiency Notice and (ii) thirty (30) days following the end of the calendar month during which the Deficiency Notice was delivered.
(b) If Delek Refining disagrees with the Deficiency Notice, then, following the payment of the undisputed portion of the Deficiency Payment to Delek Marketing, a senior officer of Delek Refining and a senior officer of Delek Marketing shall meet or communicate by telephone at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary and shall negotiate in good faith to attempt to resolve any differences that they may have with respect to matters specified in the Deficiency Notice. If such differences are not resolved within thirty (30) days following the payment of any Deficiency Payment, Delek Refining and Delek Marketing shall, within forty-five (45) days following the payment of such Deficiency Payment, submit any and all matters which remain in dispute and which were properly included in the Deficiency Notice to arbitration in accordance with Section 11.2. During the 60-day period following the receipt of the Deficiency Notice, Delek Refining shall have the right to inspect and audit the working papers of Delek Marketing relating to such Deficiency Payment.
(c) If it is determined by arbitration in accordance with Section 11.2 that Delek Refining was required to make any or all of the disputed portion of the Deficiency Payment, Delek Refining shall promptly pay to Delek Marketing such amount, together with interest thereon from the date provided in the last sentence of Section 6.9(a) at the Prime Rate, in immediately available funds.
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ARTICLE 7
ARTICLE 8
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specified in Section 6.1(b) to the extent such amount has not been paid pursuant to clause (A)(i) and (B) from and after the third anniversary of the Effective Date, Delek Refining shall be required to continue to make payments for the Services Base Fee (net of the Throughput Fee) and Services Profit Share for volumes actually sold under this Agreement, provided that the aggregate minimum amount of such Services Profit Share specified in Section 6.1(b) shall not apply for purposes of this clause (B). The Force Majeure Party shall identify in such Force Majeure Notice the approximate length of time that it believes in good faith such Force Majeure event shall continue (the “Force Majeure Period”). The Parties shall be required to pay any amounts accrued and due under this Agreement at the time of the Force Majeure event. The cause of the Force Majeure event shall so far as possible be remedied with all reasonable dispatch, except that neither Party shall be compelled to resolve any strikes, lockouts or other industrial disputes other than as it shall determine to be in its best interests. Prior to the third anniversary of the Effective Date, any suspension of the obligations of the Parties under this Section 8.1 as a result of Force Majeure event that adversely affects Delek Marketing’s ability to perform the marketing services it is required to perform under this Agreement shall extend the Term for the same period of time as such Force Majeure event continues (up to a maximum of one year) unless this Agreement is terminated under Section 8.2.
ARTICLE 9
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of the rights granted hereunder or the handling, storage, transportation or disposal of Refined Products hereunder, except to the extent that such injury, disease, death, or damage to or loss of property was caused by the gross negligence or willful misconduct on the part of the Marketing Indemnitees, their Affiliates or any of their respective employees, representatives, agents or contractors. Notwithstanding the foregoing, Delek Refining’s liability to the Marketing Indemnitees pursuant to this Section 9.1 shall be net of any insurance proceeds actually received by the Marketing Indemnitees or any of their respective Affiliates from any third Person with respect to or on account of the damage or injury which is the subject of the indemnification claim. Delek Marketing agrees that it shall, and shall cause the other Marketing Indemnitees to, (a) use all commercially reasonable efforts to pursue the collection of all insurance proceeds to which any of the Marketing Indemnitees are entitled with respect to or on account of any such damage or injury, (b) notify Delek Refining of all potential claims against any third Person for any such insurance proceeds, and (c) keep Delek Refining fully informed of the efforts of the Marketing Indemnitees in pursuing collection of such insurance proceeds.
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ARTICLE 10
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and policies; provided, however, that any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 10.1, and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law.
ARTICLE 11
(a) Delek Refining shall not assign its rights or obligations hereunder without Delek Marketing’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that (A) Delek Refining may assign this Agreement without Delek Marketing’s consent in connection with a sale by Delek Refining of all or substantially all of the Refinery, including by merger, equity sale, asset sale or otherwise, so long as the transferee: (1) agrees to assume all of Delek Refining’s obligations under this Agreement and (2) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by Delek Refining in its reasonable judgment; and (B) Delek Refining shall be permitted to make a collateral assignment of this Agreement solely to secure financing for Delek US and its Affiliates.
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(b) Delek Marketing shall not assign its rights or obligations under this Agreement without the prior written consent of Delek Refining, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that Delek Marketing may assign this Agreement without Delek Refining’s consent in connection with a sale by Delek Marketing of all or substantially all of its assets, including by merger, equity sale, asset sale or otherwise, so long as the transferee: (1) agrees to assume all of Delek Marketing’s obligations under this Agreement; (2) is financially and operationally capable of fulfilling the terms of this Agreement, which determination shall be made by Delek Marketing in its reasonable judgment; and (3) is not a competitor of Delek Refining, as determined by Delek Refining in good faith; and (B) Delek Marketing shall be permitted to make a collateral assignment of this Agreement solely to secure financing for the Partnership and its Affiliates.
(c) Any assignment that is not undertaken in accordance with the provisions set forth above shall be null and void ab initio. A Party making any assignment shall promptly notify the other Party of such assignment, regardless of whether consent is required.
(d) This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.
If to Delek Refining, to:
Delek Refining, Ltd.
0000 Xxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
Email:
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With a copy to (which copy shall not constitute notice):
Delek Refining, Ltd.
0000 Xxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: President
Fax: (000) 000-0000
Email:
If to Delek Marketing, to:
Delek Marketing & Supply, LP
0000 Xxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
Email:
With a copy to (which copy shall not constitute notice):
Delek Marketing & Supply, LP
0000 Xxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: President
Fax: (000) 000-0000
Email:
or to such other address or to such other person as either Party will have last designated by notice to the other Party.
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IN WITNESS HEREOF, the undersigned have executed this Agreement as of the date first written above.
DELEK REFINING, LTD. | ||||
By: | Delek U.S. Refining GP, LLC, its general partner | |||
By: |
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Name: | ||||
Title: | ||||
By: |
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Name: | ||||
Title: | ||||
DELEK MARKETING & SUPPLY, LP | ||||
By: | Delek Marketing GP, LLC, its general partner | |||
By: |
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Name: | ||||
Title: | ||||
By: |
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Name: | ||||
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SCHEDULE A
REFINERY PRODUCTS
Classification | Material | |
Finished Product | 87 Octane (E10) | |
Finished Product | 91 Octane (E10) | |
Finished Product | 93 Octane (E10) | |
Finished Product | 100 Low Lead Aviation Gasoline | |
Finished Product | Carbon Black Oil | |
Finished Product | Commercial Butane | |
Finished Product | Propane | |
Finished Product | Propylene Mix | |
Finished Product | Sulfur (Tons) | |
Finished Product | ULSD (on road, off road, and/or containing biodiesel) | |
Finished Product | Kerosene | |
Intermediate Product | Topped Crude | |
Intermediate Product | Cat/T.Alky Mix | |
Intermediate Product | Xxxxx Naphtha | |
Intermediate Product | FBR Naphtha | |
Intermediate Product | Vacuum Gas Oil | |
Intermediate Product | HT HSR Naphtha | |
Intermediate Product | L. Alkylate | |
Intermediate Product | LSR Naphtha | |
Intermediate Product | Lt. Cycle Oil | |
Intermediate Product | Olefins/Butylenes/Alky Feed | |
Intermediate Product | Platformate (93) | |
Intermediate Product | Platformate (99) | |
Intermediate Product | Slop Oil |
SCHEDULE B
FINISHED PRODUCT, COST BASIS AND PROFIT SHARE
*** | indicates material has been omitted pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission. A complete copy of this agreement has been filed separately with the Securities and Exchange Commission. |
Profit Share Products
Acct Code | Description | Market Index Price 1 | Market Index Price 2 | Platts Code (if applicable) | Cost Basis Formula | Location Differential | Loading Fee | Additive | ||||||||||||||||||||||
CG87E10 | 87 Octane Conventional Gasoline with 10% Ethanol | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
CG87E10P | 87 Octane Conventional Gasoline with 10% Ethanol, proprietary additive | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
CG93E10 | 93 Octane Conventional Gasoline with 10% Ethanol | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
CG93E10P | 93 Octane Conventional Gasoline with 10% Ethanol, proprietary additive | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
XX00XXXXX | 00 Xxxxxx Xxxxxxxxxxxx Xxxxxxxxxx for Oxygenated Blends, with no additives | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
CH87 | 87 Octane Conventional Gasoline | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
XX00XXXXX | 00 Xxxxxx Xxxxxxxxxxxx Xxxxxxxxxx for Oxygenated Blends, with no additives | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
***87E10 | CG87E10 with *** proprietary additive | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
***93E10 | CG93E10 with *** proprietary additive | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
AVGASO | 100LL Aviation Gasoline | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
DU74B05CTX | ULSD, undyed, TXLED containing 5% Biodiesel | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
XX00X00XXX | XXXX, dyed, TXLED containing 5% Biodiesel | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
DU74B10CTX | ULSD, undyed, TXLED containing 10% Biodiesel | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
XX00X00XXX | XXXX, dyed, TXLED containing 10% Biodiesel | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
DU74CL | ULSD, undyed, with lubricity additive | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
DU74CLTX | ULSD, undyed, TXLED, with lubricity additive | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
DU74RL | ULSD, dyed, with lubricity additive | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
DU74RLTX | ULSD, dyed, TXLED, with lubricity additive | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
***74B10CTX | ULSD, undyed, TXLED containing 10% Biodiesel for *** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
***74B05CTX | ULSD, undyed, TXLED containing 5% Biodiesel for *** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | |||||||||||||||
***74UTX | ULSD, undyed, TXLED, for *** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** | * | ** |
Profit Sharing Calculations
Sales Basis | Defined as Total Sales Revenue, by product type, including additive and loading charges, less rebates to Customers, divided by Total Sales Volume, in gallons, for that product type | |
Cost Basis | Defined as cost of sales, by product type, utilizing appropriate formulae, market price indices, and agreed rates for location differential, loading fees, and additives, calculated on a per gallon basis | |
Profit Share | Total Sales Volume, in gallons, by product * (Sales Basis - Cost Basis) * 50% |
Formulae for Cost Basis
A | *** | |||
B | *** | |||
C | *** |